LEM CUTS BACK TO STAY HEALTHY

SOUTH BOSTON, Va. -- Sometimes getting the most out of your candy section means scaling back.

That's the case at Lem Markets, an 11-store operator here that in the last year has been downsizing its candy department in the face of stiffer competition for the consumer's candy dollar.

An increased presence of mass merchandisers and larger chains, led by Food Lion, has caused Lem to adjust its candy strategy, according to Steve Reynolds, director of purchasing.

"We've had a lot of chains open up around us in our different marketing areas," Reynolds told SN.

"Our regular turns on our candy shelf aren't where they used to be. Candy manufacturers have gone up on price and the larger chains run on a little bit lower margin than we do. And we just can't stand to run the candy at a lower margin to meet their retails."

Lem decided it had to trim selling space for confections.

"We've cut the candy section back a little bit because the sales seemed to be down from where they were years ago. A lot of our stores had 16-foot sections, and we've cut that back to 8 feet and 12 feet. But you can still get in most of the variety," he said.

Not all the variety, however. Lem had to choose to eliminate certain segments that were being subjected to particularly severe competition. Mass merchandisers compounded the problem by working on even smaller margins than the larger supermarket chains, leaving Lem and other small operators holding the bag -- literally, holding loads of higher priced laydown bags that were getting harder and harder to move.

"Our larger bags of candy weren't selling, because they've gotten so expensive. So we don't carry them anymore. The largest we carry now is the 9-ounce bag," he explained.

The retailer also dropped fun-size candy bars as a regular item, confining that product segment instead to seasonal merchandising for holidays.

However, Lem Markets has increased its peg offering to offset the loss of the laydown bags business. "Now, your main movers in the aisle are the peg line items like the two-for-$1 bags and the bigger two-for-$3 bags. Their sales are fine," Reynolds said.

Currently, the company is turning its full attention to maximizing candy sales at the front end.

"We've taken our focus away from the gondola and focused more on the impulse up front," said Reynolds. He noted that the use of lane blockers chock full of candy bars is a new merchandising tactic for Lem and appears to be working.